Exports Key to U.S. Agriculture Growth, Ex-USDA Leaders Say

The U.S. will need to step up efforts to sell surplus farm production overseas if the country hopes to preserve this year’s record profit and exports, former U.S. Agriculture Secretary Clayton Yeutter said.

Trade, especially with prospering Asian nations, will be crucial to securing markets for U.S. farm goods, said Yeutter, who served under President George H.W. Bush and later became the U.S. trade representative. He was one of seven former secretaries who spoke today at a panel discussion on the future of agriculture at a government forum in Arlington, Virginia. The U.S. is the world’s largest agricultural exporter.

“I want to be sure we don’t get lulled into complacency by thinking we can sell everything we produce here in the U.S.,” Yeutter said.

Farm exports in the year that began Oct. 1 will be $131 billion, surpassed only by record shipments a year earlier, Joe Glauber, the U.S. Department of Agriculture’s chief economist, said at the forum. Farmer net income will reach $91.7 billion this year, second only to last year’s $98.1 billion, the USDA said on Feb. 13. Farmland values have also reached records.

Higher Productivity Needed

Higher productivity will be necessary to meet world food needs, with the global population expected to increase by more than 2 billion by 2050, said John Block, who served under President Ronald Reagan. Grain stockpiles at the end of this marketing year may total 471.7 million metric tons, 1.6 percent more than last year, the USDA said Feb. 9. World food prices that reached a record in February 2011 contributed to uprisings in North African and Middle East nations.

“Modern commercial agriculture is what is feeding the world now,” said Block, who criticized opponents of biotech crops that are resistant to drought. U.S. farmers may plant 94 million acres of corn this year, the most since World War II, Glauber said earlier today.

In domestic policy, U.S. farmers will need to get by with fewer subsidies and be more responsive to interests of groups outside agriculture, said Mike Espy and Dan Glickman, both secretaries under President Bill Clinton.

USDA spending would rise 2.5 percent to $154.5 billion in the year starting Oct. 1 before crop-subsidy cuts kick in, beginning long-term reductions in farmer aid, according to the budget President Barack Obama sent to Congress Feb. 13. Subsidies would fall by $32 billion over 10 years under that proposal, which lawmakers may consider as White House guidance as they forge a new five-year farm bill to replace the one that expires Sept. 30.

Farm Bill

U.S. Senator Mike Johanns, a Republican from Nebraska who led USDA under President George W. Bush, said he is optimistic that the Senate will approve a farm bill, while the legislation’s fate in the House of Representatives “is much more unpredictable.”

Subsidies predicted to reach $11 billion in 2012 are under scrutiny as Congress begins crafting the legislation, which will authorize spending for all USDA programs, including farmer payments, food stamps and rural development. The payments, while providing a safety net for farmers, encourage production and lower commodity costs for Cargill Inc. and Archer Daniels Midland Co. (ADM)

Subsidies are “not the only issue we should be talking about,” Glickman said. “The biggest challenge is our research budget,” he said. “You look at the world 20 and 30 and 40 years out, you wonder, do we have the ability to have another Green Revolution” that can boost productivity to meet global needs, he said.

The panel also included Ann Veneman and Ed Schafer, who both served under George W. Bush.

Including the moderator, Tom Vilsack, the current USDA chief, the panel represented more than a quarter of all the secretaries in the agency’s 150-year history.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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